Ontario cancels Starlink contract, won’t do deals with US firms
Sign up now: Get ST's newsletters delivered to your inbox
Economists say if the trade war continues, Canada is likely to face the most severe economic shock since the Covid-19 pandemic.
PHOTO: AFP
Follow topic:
TORONTO – The Canadian province of Ontario on Feb 3 announced it was cancelling a C$100 million (S$93 million) contract with Elon Musk’s Starlink, the latest retaliatory move against tariffs announced by US President Donald Trump
Ontario, the most populous of the 10 provinces and Canada’s industrial heartland, also said it was banning US companies from provincial contracts.
“There’s no sugar-coating it - the coming days and weeks will be incredibly difficult. Mr Trump’s tariffs are going to devastate our economy,” said Ontario premier Doug Ford, saying Canada had to hit back hard.
Starting on Feb 4, Mr Trump says he will impose a 25 per cent tariff on virtually all Canadian imports except for oil, which faces a 10 per cent surcharge. If prolonged, the measures would send the Canadian economy into a recession.
The move generated widespread shock across Canada, which has traditionally prided itself on being a close US ally and trading partner.
Ford, one of the more hard-line premiers on the question of retaliation, said US-based businesses would lose out on tens of billions of dollars in new revenues and only had Mr Trump to blame.
“We’ll be ripping up the province’s contract with Starlink. Ontario won’t do business with people hell-bent on destroying our economy,” he told a news conference.
Under the terms of the deal, which Ontario signed last November, Starlink was to provide high-speed internet access to 15,000 eligible homes and businesses in more remote communities. Mr Musk, a close Trump ally, is heading the US President’s drive to shrink the federal government.
Starlink was not immediately available for comment.
Ford has called a snap election for Feb 27, which polls suggest his Progressive Conservatives will win easily.
Ford has already ordered the province’s liquor board - which sells more than C$1 billion of US alcohol a year - to remove all American products from its shelves
Prime Minister Justin Trudeau on Feb 1 announced Canada would impose 25 per cent tariffs on C$155 billion of US goods in response to the US measures.
Mr Trump says the tariffs - which he also imposed on Mexico - will stay in place until Canada does more to fight illegal migrants and fentanyl smuggling.
Mr Trump said on Feb 3 he had struck a deal with Mexico whereby the tariffs would be suspended for a month in return for more action on the border.
Canada is not optimistic it can get the same kind of one-month reprieve from US tariffs that was granted to Mexico, the New York Times cited a senior government official as saying.
Mr Trump said he had spoken to Mr Trudeau on Feb 3 and would be speaking to him again at 3pm Eastern time.
Mr Trudeau is due to speak to a special advisory council on US-Canada relations later on Feb 3.
The tariffs are unprecedented, especially since the United States, Canada and Mexico are part of a continental free trade pact. In protest, Canadians cancelled trips south of the border, boycotted US alcohol and other products and even booed at sporting events.
Mr Kevin Hassett, the director of the White House’s National Economic Council, told CNBC that Canada had “misunderstood” the tariffs
